Car Lease

With a Finance Lease the financier purchases the car required by the customer and then leases it to the customer. The customer pays a rental to the financier to use the car. At the end of the agreed rental period the customer can return the car which will be sold at auction or the financier may offer to sell the car to the customer.

Benefits to Business

Security is usually the asset itself - preserving access to working capital credit lines.

No capital outlay - no upfront deposit needed, which means you can use your working capital for other core business needs.

Tax deductible - generally the rental is deductible to the extent the asset is used in your business.

End of term value is attributed to the asset - thus reducing the cash flow impost.

Simplicity - rentals will be automatically debited from your nominated business account.

Goods and Services Tax (GST)

Under a Finance Lease, the financier is the purchaser and owner of the asset and hence is entitled to claim the Input tax Credit (ITC). The amount financed on the car will be net of the ITC claimed by the financier. GST is payable on the rental payments over the life of the contract and the residual amount.

GST is paid on all fees and charges.

If the customer holds an ABN they may be able to claim any GST as an Input tax Credit (ITC) each month or quarter.